In addition to inflation and rising interest rates, Quebecers will also see the school tax hike. However, the government will limit this increase to 3% to avoid a price shock.
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School service centers are also severely affected by inflation. They even forecast a 17% increase in school tax bills.
These increases are typically paid for by taxpayers to allow the centers to absorb additional expenses related to school services and salary adjustments.
However, on the eve of the elections, Finance Minister Éric Girard announced that he would limit the school tax hike from 2% to 3%.
For example, the owner of a $350,000 home would have suffered an increase of about $60. By intervening, that increase will be $10, he says.
The School Service Centers shortfall is offset by $173 million in annual funding from the government.
Not campaign
“Homeowners face rising inflation like everyone else, but they also face a multiplier, which is rising interest rates. There are also a lot of people who have adjustable rate mortgages,” the finance minister added, arguing that this is not an optional measure. “We had to announce that today. The school tax rate is published today. The tax statements will be sent out in July.
After the $500 checks, this is an additional measure to counter the rise in the cost of living. Therefore, inflation is forcing Quebec to readjust and use its reserves to help families and maintain services.
More than planned
With this rise in the cost of living comes the risk of a recession. On Wednesday, the United States Federal Reserve raised interest rates by 0.75%.
“It was fully expected by the markets,” he said, arguing that the reserve is in catch-up mode.
When the latest budget was presented, Minister Girard put the probability of a recession at 25%. On Wednesday he increased it to 35%. Regardless, he refuses to say the situation is getting worse.
“Inflation is higher than we expected, so central banks need to tighten monetary conditions significantly and that will slow the economy,” he said.
This increase is explained by the invasion of Ukraine by Russia, which led to an increase in energy prices, as well as the sanitary restrictions in Shanghai, which led to “bottlenecks” in the supply of the chains.
“You have to understand the horizon that central banks are working on. A rate increase is said to have an 18 to 24 month horizon,” the minister said.
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